How to make taxation "fair"?

B

Brigadier

Joined
14 Jan 2008
Messages
16,782
Reaction score
2,711
Location
Staffordshire
Country
United Kingdom
Seems an opportune moment in time to throw a few ideas about.


My immediate, knee-jerk idea would be:

- bin all taxation, bar VAT (level to be set by government, to balance the books to the maintain UK on even (improving!) keel, and international reliability);

- UK VAT to be paid on anything and everything bought or used in UK.*




Theory being:

- earn / acquire whatever you like tax-free
- the minute you buy (a good or service), you pay VAT for the privilege.


The majority can just get on with their lives, earning money and spending it.

Those who live a lavish lifestyle (whether they can afford to, or not; not my problem if they can't), contribute more to the Exchequer.

* to stop chancers buying gear abroad, to use here.
 
Sponsored Links
I agree. Scrap income tax and just tax on goods and services. Then surely this would do away with the black market and cash in hand.


Let's say a Bentley is taxed at 40%
But a Ford Fiesta is taxed at 30%
A van/ work vehicle taxed at 20 %.
 
Sponsored Links
Sounds like Dubai.

While I'd like to earn my income tax free and only pay VAT on what I spend. I can see it wont be particularly fair on people who don't have much income.

Currently about half my earnings go in tax. Paying VAT only would leave me about 50% better off. Assuming I saved a lot, which I would it might even be as much as 80%. Someone who earns 25k per year is probably going to spend most of what they earn, so they would be worse off. having to pay VAT on essentials.
 
motorbiking said:
Sounds like Dubai.

While I'd like to earn my income tax free and only pay VAT on what I spend. I can see it wont be particularly fair on people who don't have much income.

Currently about half my earnings go in tax. Paying VAT only would leave me about 50% better off. Assuming I saved a lot, which I would it might even be as much as 80%. Someone who earns 25k per year is probably going to spend most of what they earn, so they would be worse off. having to pay VAT on essentials.
Click to expand...


Depends what levels VAT is set at.

Some stuff would be zero rated.
Some, at eye-watering levels.

Nadhim would have to live in a bedsit and subsist on Basics baked beans, to avoid tax.
 
So for the things with eye-watering levels of tax.
- what about people who live in the UK making and selling this product?
- Do you think people would base themselves elsewhere to buy them?
- would the companies who make these products want to hire, train and develop people in the UK to build this super taxed product or would they locate elsewhere?
 
Change the voting system so that only those who pay (or who have paid a certain level of) tax are allowed to vote.

Jail any MPs who do not carry out their election promises.

**No taxation without representation**
 
I find quite a few aspects of taxation frustrating. I'm going to type an example of this that hopefully makes sense! I work a so-called ordinary job, Mon-Fri 9-5 and I'm PAYE. People will either agree or disagree that it's right to be taxed on that income, so let's park that for now. However, let me give you scenario A. In this scenario, I only do my PAYE job until I retire, I do nothing else income wise. Let me also give you scenario B. In this scenario, I set up an OnlyFans account (in addition to working my 9-5) and post pics of my hairy belly. It's a hit! Within a year I'm earning a very respectable sum from my OnlyFans each month.

I've done this completely off my own back, to boost my income. I'm not using any government/local authority services or infrastructure that I'm not already paying for. All I'm using is my computer, a camera and my broadband. However, if I'm honest and declare the income, the government will say 'thank you very much, we're taking X% of that additional income in tax.'

So, because I decide to boost my income and put whatever effort into doing so, I'm taxed further. And some of that tax filters down to people that choose to sit on their backsides day in day out not working, with no intention of working.
 
diy_fun_uk said:
I find quite a few aspects of taxation frustrating. I'm going to type an example of this that hopefully makes sense! I work a so-called ordinary job, Mon-Fri 9-5 and I'm PAYE. People will either agree or disagree that it's right to be taxed on that income, so let's park that for now. However, let me give you scenario A. In this scenario, I only do my PAYE job until I retire, I do nothing else income wise. Let me also give you scenario B. In this scenario, I set up an OnlyFans account (in addition to working my 9-5) and post pics of my hairy belly. It's a hit! Within a year I'm earning a very respectable sum from my OnlyFans each month.

I've done this completely off my own back, to boost my income. I'm not using any government/local authority services or infrastructure that I'm not already paying for. All I'm using is my computer, a camera and my broadband. However, if I'm honest and declare the income, the government will say 'thank you very much, we're taking X% of that additional income in tax.'

So, because I decide to boost my income and put whatever effort into doing so, I'm taxed further. And some of that tax filters down to people that choose to sit on their backsides day in day out not working, with no intention of working.
Click to expand...
I'm told there's specialist websites for your hairy belly to thrive...you may not like the responses.:cautious:
Stick to the day job, i say.
 
You know far more about taxation than I ever will @motorbiking , which I why I prefaced my thread with the "knee-jerk" qualifier.

That said:

motorbiking said:
So for the things with eye-watering levels of tax.
- what about people who live in the UK making and selling this product?
Click to expand...

How many Bentley workers own a Bentley?
How would "my" proposal change anything for them?

motorbiking said:
So for the things with eye-watering levels of tax.

- Do you think people would base themselves elsewhere to buy them?
Click to expand...

If they're not here, they're not using the services nor enjoying the security that the taxation pays for.
Also, see my * point.

motorbiking said:
So for the things with eye-watering levels of tax.

- would the companies who make these products want to hire, train and develop people in the UK to build this super taxed product or would they locate elsewhere?
Click to expand...

Eh? Where a product or service is designed, developed, and manufactured is not driven to any great extent by the VAT charged on that product or service.
 
No its a massive consideration.

Its why half of silicon valley based its European sales in Dublin. Its why a lot of Californian companies have moved to Texas. Its why Silicon Glen (Scotlands high tech sector) moved away almost over night.

The primary considerations when locating a facility, is proximity to market, access to resources, local incentives.

The problem we have is changing tax rules, like all laws, can often have unintended consequences.

Remember the shopping inspectors during covid? or the rise of ANPR car parks?
 
The would-be conspiracy theorist in me wonders if the tax system is intentionally complex, thus enabling 'the rich' to finds ways to avoid/evade paying as much as they should. I was watching a tv prog last year and a UK billionaire stated he pays more than he probably has to. In short, if he so desired, his money managers could find ways for him to pay less.
 
You could say the same for law, its to keep lawyers employed. I suspect the rules are rules on top of rules, with unintended consequences, resulting in changes to rules.

Capping pensions probably made sense to avoid lost tax revenue, but the consequences will be more people with their hand out for state benefits when they retire.

2nd property tax, impacted the housing market as those with more than 1 house were stuck in their home due to the extra fees.

Increases in corporation tax results in HQs moving elsewhere, increases in income tax results in off-shore earning. EU tax harmonisation allows rich countries to "steel" tax from poor countries.

One countries tax incentive is another's tax haven.
 
You must log in or register to reply here.
Sponsored Links
Back
Top